Strengthening accountancy and audit education of financial statements preparers and tax employees, and technical capacities of the accounting and audit professions.
Under this component support will be provided to various stakeholders in enhancing their understanding and practical application of accounting and auditing standards, including developing modern audit methodologies to facilitate sound quality audits; stakeholders for this component will include universities, members of professional organizations, and staff of tax authority. Key outputs include preparation and delivery of large scale training programs for lecturers, financial statements preparers, employees of Tax Authority, and auditors.
Specifically, the proposed activities will include:
(i) preparation of adequate didactic training materials for universities on the updated curricula, and provide train the trainer courses will be delivered in advanced topics to assist the professors of universities;
(ii) conduct a survey to assess the needs of accountants for training and, based on the findings of the survey, prepare a training programs on IFRS and NAS. The National Accounting Council will use the capacity and knowledge gained in the implementation of CFREP to plan and organize the survey;
(iii) Provide a large scale training program to actual and potential financial preparers on updated NAS and IFRS in close cooperation with the National Accounting Council. Members of the Tax Authority will participate in these trainings;
(iv) training for trainers of Tax Department will be organized to ensure the replication of trainings of this project from local trainers, contributing in a long term impact
(v) Carry awareness workshop to accountants associations on IFAC membership requirements;
(vi) Assist in creating a sound framework for reconciliation of financial statements with tax returns and map areas which may need closer alignment or proper reconciliation;
(vii) Assist preparation of comparative reconciliation tables which will address the accounting practices based in NAS and IFRS and where they differ from tax legislation requirements, as well as a set of guidelines, including examples and case studies, to help tax inspectors understand and use the comparative reconciliation tables.
(viii) Assist IEKA to develop and deliver a comprehensive training program for auditors on ISA;
(ix) Training program on quality assurance based on an ISA approach and covering internal quality control systems;
(x) Provision to IEKA members of audit tool and methodology which will assist the auditors to perform audit work , as well as training on application and use of the methodology and tool;
(xi) Preparation of a high level strategic development plan for IEKA and developing technical skills for IEKA staff;
Monitoring and enforcement of financial reporting and auditing by strengthening the audit oversight system and enhancing capacities of regulators in financial reporting.
This component will finance technical assistance, training, on the job training to improve the operation of the Public Oversight Board, as well as enhance capacity of POB and financial regulators in monitoring and enforcing higher quality of IFRS-based financial statements by financial institutions. Key deliverables include capacity building support for POB inspectors;assistance to Bank of Albania (BoA) and Albanian Financial Supervisory Authority (AFSA) to improve their ability to monitor/enforce publication of PIEs financial statements, support to POB, BoA and AFSA to establish an efficient cooperation protocol on quality assurance for the audits of financial sector companies; and IFRS trainings for financial regulators.
The proposed activities of the component are:
(i) Technical assistance for POB to draw its strategic development plan, and support to inspectors and Board members to enable them to exercise the oversight function including on the job trainings;
(ii) Technical assistance to POB, BoA, and FSA to establish an efficient protocol of cooperation on the quality assurance for the audits of financial sector companies, which comprise most of Public Interest Entities;
(iii) Assist POB to perform a limited number of inspections of audits of financial sector companies and support follow up of results;
(iv) Deliver trainings on IFRS, focused on the specifics of each industry to beneficiary institutions (BoA and FSA), as well as introductory training on ISA. To maximize the impact, the activities with the BoA and AFSA will be coordinated with other existing and prospective WB supported projects benefiting these institutions.
Improving transparency and disclosure of financial information in filing and publication of statutory financial statements.
This component will provide support for National Register Centre to establish software, regulations and processes, as well as receive capacity building so to improve its activities in collecting financial statements/audit reports and making them available to the public. The users of such financial information are analysts, investors, creditors, who are using financial information for resource allocation purposes (lending, investment, etc.), but also the general public in case of SOEs or public interest entities.
Activities to be included are:
1) facilitate modification and development of database and related applications for submission of financial statements and audit reports (electronically), related quality assurance, and facilitate secure web access by public to the database;
2) modification of server hardware to permit the storage of financial information for a period of time as required by EU directives and Albanian legislation;
3) prepare necessary law amendments and/or regulations, and operations manual,
4) train NRC staff on using the new system and its procedures and enable gaining of experience on these function with a EU member country,
5) support awareness activities related to the new arrangement for submission and publication. Stakeholder is the Ministry of Economy and the National Registration Center.
This component will include necessary incremental operating costs related to project management, including the overall reform management and coordination, project related fiduciary activities (procurement and financial management), as well as monitoring and evaluation (M&E) activities which would serve the authorities to ensure the long term sustainability of the reform results.
This component will facilitate preparation of the next phase of the reform program through the preparation of a phase 3’s project proposal, which is expected to be funded by IPA. This component also envisages support to the Ministry of Finance on keeping reform momentum, as well as public awareness activities aimed at disseminating the importance of financial reporting among various stakeholder groups, including users of financial information.